Despite a shock profit warning that will result in losses up to £8bn,taxpayer-backed Royal Bank of Scotland said last night it would still ask shareholders for permission to pay top executives 200% bonuses.

The City’s shop specialists today warned supermarket giant Tesco it should wait until struggling mother and baby products retailer Mothercare is “more distressed” before planning a bid. Reports emerged at the weekend that Tesco could be eyeing the babywear chain and today Mothercare’s share price shot up more than 4%. But analysts at Cantor Fitzgerald and Shore Capital declared Tesco should not make a bid at this time.

City regulator, the Financial Conduct Authority, has appointed consultancy Promontory Financial and accountants Mazars to report on Royal Bank of Scotland’s treatment of business borrowers in the wake of Lawrence Tomlinson’s report.